He Xun Investment Advisor Li Guanqin: Sudden Sharp Rally, How to Respond on Tuesday!

The recent market has been unpredictable both in news and trend. Over the weekend, a 48-hour time limit directly led to the A-shares’ major indices closing with the largest short-term long shadow line today. Late at night, the European and American markets suddenly surged on news stimuli, which is likely to bring some emotional recovery for tomorrow. How should we respond specifically? Everyone only needs to focus on two signals.

The first signal is whether the overall overseas market can maintain strength at the close today. If it closes strongly, the A-shares may open with a rally tomorrow—meaning if the index opens significantly higher, caution is needed against chasing the rally. From a technical perspective, today’s volume-down decline indicates real short-term pressure and genuine trapped positions. Quickly releasing these trapped positions on the left side in the short term is very difficult.

The second signal is if the overseas market does not perform as expected tonight, then the index needs to do one of two things tomorrow—either bottom out around 3726 points or form a support at that level. Only when a support forms near this level can a true small rebound occur. Whether with increased volume or decreased volume, structurally, the current pattern is an accelerating three-wave. If volume decreases, it indicates a small wave four in this pattern. The overall trend remains downward, and with unpredictable news and emotional swings, the market is easily driven by sentiment in the short term, making trading more challenging.

Last Thursday, I warned that once the index falls below 4000 points, it would accelerate the bottoming process, which has now been confirmed. More importantly, 10 a.m. tomorrow is a critical point—whether for bottoming and shaking out, or for leveraging overseas market sentiment to push higher, both will happen before 10 a.m. tomorrow.

（Editor: Zhang Yan）

【Disclaimer】This article only reflects the author’s personal views and is not related to Hexun.com. Hexun maintains neutrality regarding the statements and opinions in this article and does not provide any explicit or implicit guarantees on the accuracy, reliability, or completeness of the content. Readers should use it for reference only and bear all responsibilities themselves. Email: news_center@staff.hexun.com